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How to Stretch Your Retirement Income During Inflation
Use these strategies to cut costs, protect your savings and generate extra cash
Jon Krause
Key takeaways
- Nearly half of retirees say expenses have exceeded expectations, making inflation a top financial concern.
- Retirees can stretch their income by cutting expenses, reviewing insurance and Medicare coverage, and canceling unused subscriptions.
- Protecting savings with a balanced investment strategy and finding new income sources can help offset rising costs.
As the cost of everything from groceries and gas to health care and utilities continues to rise, many retired Americans are finding that their money isn’t going as far as they thought it would.
“Retirees are a little shocked to see how much things are costing,” says Ross Mannino, a wealth adviser with Ameriprise Financial in Westport, Connecticut. Nearly half of retirees say their expenses have exceeded their expectations, according to Schroders’ 2026 U.S. Retirement Survey, and inflation’s impact on their savings is their top financial concern.
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However, financial advisers say retirees have more control during times of high inflation than they might realize. “The retirees who do best aren’t necessarily the ones with the biggest nest egg,” says Pam Krueger, CEO and founder of Wealthramp, a service that connects people with fee-only financial advisers.
“They’re the ones who make smart decisions about their biggest expenses, eliminate waste and keep enough of their portfolio growing to stay ahead of inflation,” she says.
In other words, the key to stretching your retirement income is making the most of what you have. So follow these tips to reduce expenses, protect savings and make extra cash.
Trim your spending
Start by focusing on your biggest monthly expenses, Krueger suggests. Finding ways to lower those costs could free up a lot of cash in your budget. Then, if you need to make further cuts, you can focus on scaling back smaller recurring expenses.
Here are a few expert-recommended moves to save money.
Consider downsizing. The savings won’t be immediate — it takes time to sell a house and move to a smaller place — but the payoff can be big. “Downsizing gives you a smaller mortgage but also reduces property taxes, homeowners insurance, utilities and maintenance,” Krueger says.
The average net gain for downsizing from a four-bedroom home to a two-bedroom home is $200,000, according to an analysis by StorageCafe, an online platform that provides storage unit listings nationwide.
Get by with one car — or no cars. Retirement is a time to downsize more than just your home, Mannino says. Without a daily commute to work, your household might be able to get by with fewer vehicles, he says. The savings could be substantial — the average cost of owning a car, including gas, maintenance and insurance, is nearly $12,300 a year, according to AAA. You could even eliminate the need for a car altogether if reliable public transportation or transportation services for older adults is in your area.
Reshop your home and auto insurance. You might be able to shave thousands off your annual premiums by switching insurers. You can compare car and home insurance rates from multiple companies by using marketplaces such as Insure.com, NerdWallet or Policygenius. Or use an independent insurance broker to do the comparison shopping for you.
See if you can save on Medicare costs. You have an opportunity every year during open enrollment (Oct. 15 to Dec. 7) to review your current Medicare Advantage plan or Medicare Part D prescription plan and make changes for the coming year — or sign up for a Medicare Advantage or Part D plan if you don’t already have one.
“Prescription needs change, plans change, and many retirees leave hundreds or even thousands of dollars on the table by simply renewing the same coverage,” Krueger says. The federal government’s Medicare plan finder tool can help you compare plans in your area.
Reduce food expenses. Using grocery coupons, taking advantage of senior discounts at supermarkets and planning meals around what’s on sale can help combat rising food costs. You might also save by replacing pricey foods with more wallet-friendly choices, such as opting for chicken instead of beef.
Also, consider cutting down on restaurant outings. “You’d be surprised at the money you can save,” says Mannino, who packs lunch for work and forgoes restaurant dining in favor of more affordable dinners at home.
Switch service providers or negotiate lower rates. Taking the time to compare rates for home internet, cable TV, cellphone and other services can pay off. Steven Conners, founder and president of Conners Wealth Management in Scottsdale, Arizona, says he cut his monthly wireless bill in half by switching providers. Sometimes just letting your service provider know that you’re considering switching to another company can help you negotiate a lower rate.
Cancel unused subscriptions. Adults in the U.S. spend an average of $252 annually on unused subscriptions, according to CNET’s 2026 State of Subscriptions report. “Streaming services, apps and memberships have a way of multiplying,” Krueger says. She recommends auditing subscriptions at least twice a year to identify any that are going unused and canceling them. If you use multiple streaming services, consider rotating them throughout the year to save money.
Take advantage of free community resources. You can enjoy a variety of free activities offered by your public library, parks and recreation department and senior center. And don’t overlook your local area agency on aging, Krueger says. “They can connect you with transportation, meal programs, utility assistance, benefits counseling and free tax preparation,” she says.
Make your savings last
Rising prices mean your retirement savings might not go as far as you had hoped. But that doesn’t mean you have to sit by and watch your purchasing power erode. Here are several steps you can take to inflation-proof your nest egg.
Create a balanced portfolio. Mannino says retirees often have competing priorities: preserving their savings while still generating enough growth to outpace inflation. To accomplish that, he recommends a portfolio with growth-oriented investments, such as stocks, and more stable fixed-income investments, such as bonds.
“The appropriate mix will vary based on an individual’s goals, income needs, time horizon and tolerance for risk, which is why having a long-term financial plan is so important,” Mannino says.
Consider inflation-protected Treasury bonds. Treasury Inflation-Protected Securities are sold by the U.S. Treasury and “provide built-in inflation protection while helping preserve purchasing power over time,” Krueger says. TIPS can be part of the conservative portion of your portfolio.
Look into annuities. These insurance products offer a guaranteed stream of income in retirement. Conners recommends fixed-indexed annuities, which are tied to the performance of a market index such as the S&P 500. The rate of return will be capped, so they might not perform as well as the index to which they’re tied, but they don’t lose value when the market drops, he says.
Get higher interest rates on cash accounts. As of late August, the annual percentage yield on savings accounts averaged 0.63 percent, according to Bankrate. But Mannino says you don’t have to settle for a rate that doesn’t keep pace with inflation. You can find short-term certificates of deposit (CDs), money market accounts and high-yield savings accounts with interest rates of 4 percent or higher.
Withdraw funds at a conservative rate. You might have a large nest egg, but to ensure that it will last decades — especially during periods of high inflation — you need to know how much you can afford to withdraw annually from your savings to avoid running out of money. For example, if you are in your early 60s and have $1 million in retirement savings, “a 4 percent distribution rate is as much as you want to take,” Mannino says.
Boost your income
There are plenty of ways to generate extra cash in order to supplement retirement savings, without returning to the 9-to-5 grind.
Sell what you don’t need. You can cash in on collectibles, sell gold jewelry or sterling silverware, or make money off furniture you can’t take with you when you downsize. “Look around your house — everything is worth something to someone,” Mannino says. (Your children might thank you for leaving them with less.)
Put underused assets to work. “A spare room, an ADU [accessory dwelling unit] or even garage storage can create additional income,” Krueger says. Websites such as Airbnb, Neighbor, RVshare or Swimply make it easy to rent out your home, garage, recreational vehicle or swimming pool, respectively. Or you could get paid for letting others borrow your vehicle through a peer-to-peer rental platform such as Turo, Free2move or Getaround.
Find unclaimed assets. One in 7 Americans have unclaimed checks, financial accounts, safe deposit boxes or other property that has been turned over to states for safekeeping, according to the National Association of Unclaimed Property Administrators. You can find out if you have unclaimed property in states where you’ve lived or worked at MissingMoney.com, where the average claim is $2,080.
Pick up part-time work. You could leverage your professional skills to find freelance or consulting work. Websites such as Catalant, Braintrust and FlexProfessionals can help you connect with companies that are looking for a professional with your skills. Or you could find part-time work that aligns with your passions. “If you love golf, you could work at a pro shop,” Conners says.
Delay claiming Social Security. If you haven’t already started collecting Social Security, there’s a way to boost your monthly benefit. “Delaying Social Security is one of the best financial decisions available,” Krueger says.
Delayed retirement credits start accumulating the month you reach your full retirement age (FRA), which is 66 and 10 months for people born in 1959 and 67 for people born in 1960 or later. For every month from your FRA until age 70 that you postpone filing for benefits, Social Security increases your eventual benefit by two-thirds of 1 percent — a total of 8 percent for each year you wait.
The key takeaways were created with the assistance of generative AI. An AARP editor reviewed and refined the content for accuracy and clarity.
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